Personally, I think this is crazy. I've been to Alcatraz and I find it fascinating. Yes, it is an old prison sitting on one of the most beautiful spots in the world - which is precisley what made it such a punishment. It housed some of the most notorious criminals in U.S. history (Hello, Al Capone!) and has spawned countless books and movies of both the fact and fictional varieties.
The suggested structure kind of reminds me of Epcot Center:
I checked out this group's website out of curiosity. It's pretty new-age hippie: "By Converting Alcatraz Island, a place of pain and suffering,Into a "JEWEL OF LIGHT". We will activate Powerful Forces for Cooperation, Reconciliation & Healing."
Yeah, right. Tearing down a piece of history isn't going to lay the foundation of peace, or bring tourism dollars to San Francisco. Leave Alcatraz alone. Save the Rock!